Wednesday, 16 February 2011
Monday, 14 February 2011
Football Creditor Rule - Red Card?
I'm certainly not anti-football (in fact I'm an avid Stoke City fan - no comments please!)
However, HMRC is challenging the controversial "football creditors rule" where the Football Association insists that all football creditors must be paid in full (managers, players, clubs etc) before any other creditor if a football club goes into administration/CVA etc. This effectively means that the FA becomes a super-preferential creditor. See article here. I don't always agree with HMRC but in my view it is right to tackle (sorry!) a situation that is clearly against the provisions of the Insolvency Act 1986.
I'm all for any measure that helps rescue a business, including a football club, but everyone has to be on a level playing field (sorry again!) for it to be fair play (ouch!) for all!!
(I'll try and moderate the football puns in any subsequent blogs!)
However, HMRC is challenging the controversial "football creditors rule" where the Football Association insists that all football creditors must be paid in full (managers, players, clubs etc) before any other creditor if a football club goes into administration/CVA etc. This effectively means that the FA becomes a super-preferential creditor. See article here. I don't always agree with HMRC but in my view it is right to tackle (sorry!) a situation that is clearly against the provisions of the Insolvency Act 1986.
I'm all for any measure that helps rescue a business, including a football club, but everyone has to be on a level playing field (sorry again!) for it to be fair play (ouch!) for all!!
(I'll try and moderate the football puns in any subsequent blogs!)
Monday, 7 February 2011
50 year Personal Insolvency High
It's official...
Statistics released by the Insolvency Service on 4 February 2011 (here) show personal insolvencies (a combination of Bankruptcies, Individual Voluntary Arrangements and Debt Relief Orders) to be the highest in any one year since records began in 1960 - 2010 saw personal insolvencies top 135,000.
This does not of course include individuals who are simply struggling to cope with credit burdens whilst trying to do so on their own, or indeed people who are in Debt Management Plans. As a conservative estimate, you can probably multiply the insolvency figure by a factor of 10 to get a rough idea of the number of these classes of debtors.
I can only (with a certain amount of trepidation) predict that these numbers will increase during 2011. It is somewhat inevitable given the Government Spending cuts resulting in job losses, potentially raging inflation and the VAT increase making everything that little bit more expensive for Joe Public. A large proportion of Joe Public is already struggling just to pay the mortgage and put food on the table.
As an Insolvency Practitioner dealing with corporate insolvencies (as well as individuals) I have seen an increase in directors seeking advice from me as to how to deal with financial difficulties relating to their businesses. An increasingly larger proportion of that advice (compared to 2010) is sadly now resulting in those companies entering a formal insolvency procedure (such as liquidation or administration) where it is unlikely that jobs can be saved. As well as job losses directly attributable to the spending cuts, private companies are also shedding jobs in one form or another.
I think the Coalition's hope that private industry will at least replace the jobs lost through the Government's spending cuts is looking increasingly unrealistic, at least for 2011. This can only lead to more fiancial difficulties at a personal level.
Once again, I would urge both directors and individuals to seek professional advice on dealing with their financial difficulties as early as possible. And by this I don't mean calling the freephone number of a debt advisor you may see in the newspaper. Whilst some of these are reputable, the old adage of "you get what you pay for" still holds true!!
Statistics released by the Insolvency Service on 4 February 2011 (here) show personal insolvencies (a combination of Bankruptcies, Individual Voluntary Arrangements and Debt Relief Orders) to be the highest in any one year since records began in 1960 - 2010 saw personal insolvencies top 135,000.
This does not of course include individuals who are simply struggling to cope with credit burdens whilst trying to do so on their own, or indeed people who are in Debt Management Plans. As a conservative estimate, you can probably multiply the insolvency figure by a factor of 10 to get a rough idea of the number of these classes of debtors.
I can only (with a certain amount of trepidation) predict that these numbers will increase during 2011. It is somewhat inevitable given the Government Spending cuts resulting in job losses, potentially raging inflation and the VAT increase making everything that little bit more expensive for Joe Public. A large proportion of Joe Public is already struggling just to pay the mortgage and put food on the table.
As an Insolvency Practitioner dealing with corporate insolvencies (as well as individuals) I have seen an increase in directors seeking advice from me as to how to deal with financial difficulties relating to their businesses. An increasingly larger proportion of that advice (compared to 2010) is sadly now resulting in those companies entering a formal insolvency procedure (such as liquidation or administration) where it is unlikely that jobs can be saved. As well as job losses directly attributable to the spending cuts, private companies are also shedding jobs in one form or another.
I think the Coalition's hope that private industry will at least replace the jobs lost through the Government's spending cuts is looking increasingly unrealistic, at least for 2011. This can only lead to more fiancial difficulties at a personal level.
Once again, I would urge both directors and individuals to seek professional advice on dealing with their financial difficulties as early as possible. And by this I don't mean calling the freephone number of a debt advisor you may see in the newspaper. Whilst some of these are reputable, the old adage of "you get what you pay for" still holds true!!
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